BP Attorney Fighting Federal Fines

— February 20, 2013

Rupert Bondy, general counsel for BP, says he doesn’t expect his client to be found grossly negligent for the 2010 Gulf oil spill. The non-jury civil trial is set to begin on Monday in the New Orleans court of Judge Carl Barbier, and will apportion responsibility for the oil rig disaster among BP and its contractors: Transcocean and Halliburton.

BP recently reached a settlement in their criminal case and agreed to pay $4 billion, and, just last week, Transcocean agreed to a plea deal of $400 million in criminal penalties. Neither settlement included an admission of gross negligence, though Transcocean did agree to plead guilty to violating the Clean Water act on account of negligence.

Although gross negligence is a very high standard to prove, BP has several points working against them. The cause of the blowout at the Macondo well was a failure of industry management to heed critical data and proper safety procedures in favor of money and time-saving decisions. The failure to properly cement the well, the failure to properly address inconclusive results of negative pressure tests, and removal of a critical safeguard by replacing heavy drilling fluid with seawater are among some of the critical decisions that led to the failure of BP’s Macondo well and the subsequent explosion and oil spill.

If BP is found to be grossly negligent, it will amount to a substantial increase in fines, as high as $4,300 per barrel of oil spilled. BP has also argued that the amount of oil spilled was significantly smaller than the nearly 5 million barrels currently estimated by the US government. The best case scenario for BP is that they will be paying $5 billion in fines rather than $20 billion. Wesley Bowden, attorney with Levin Papantonio, adds that, “In addition to potentially quadrupling the fines BP faces under the Clean Water Act, a finding of gross negligence would give greater strength to the punitive damages claims of individuals suing BP under general maritime law.”